Bitcoin Forum

https://twitter.com/demoinvestor/status/877163460961939456

What do you guys think? Bitcoin definitely seems overbought... is this an indication that the trend is turning bearish? Is buying interest diminishing? Looks like we may currently be near the peak of the right shoulder in a head and shoulders reversal pattern.

yep I sold for gold/silver/fiat and ltc, see you guys at 1500 or less

Good, now we just need 500 more people like you to have a shaking hand and dump for the rest of us, 500 people each dumping 1K Bitcoins I believe that should do it, but what if instead of going down it starts to rise? I recall when people were causing chaos because price was $1250 and they couldn't buy any more, it went to $1500 then $1700 and when it hit $2000 I myself was begging for $1500-$1200.
One thing I've learned even price drops to $200 we'll be bitching around about how expensive it is and how we can't afford to buy any. lol

Here is OP's image:

https://pbs.twimg.com/media/DCxPgwcVwAEbYD8.jpg

And yes, it does look like a head and shoulders pattern - that means a drop down to about $1400?

Looks more like a reverse head-and-shoulders to me:

http://i664.photobucket.com/albums/vv10/JimboToronto/reverseHnS.jpg

TA (technical analysis) is a self fulfilling prophecy, the more people believe that it is real and act, the more real it becomes.
It reminds me of that Amazon show 'American Gods', where the Gods only exist when people believe in them.

I don't own any btc, I trade stocks. When people start mass selling, prices don't rise.

This might be partially true but either way, you are saying it is an accurate forecast (regardless of whether or not it is causal).

That's the most lopsided, two headed and shoulders pattern I've seen.

I'd have to say the h&s pattern is the most overused, and incorrectly called pattern in the history of TA. Too much "outside influence" that no one can really factor in. If the Bitcoin upgrade goes smoothly, we go north of $3000. If it doesn't, then a reversal will probably play out.

Doesn't look two headed or lopsided at all, it looks very clear imo.

Just to summarize though, your prediction is that bitcoin will either go up, or go down. Did I get that right?

funny, probably will go up and down and up again

I think your dream will never come true, $2000 is floor right now and I don't think price will go below that range in near future. If you get lucky, your buy orders at $2000 might get executed but $1500 is not possible.  ;) ;D

haha, you wish.
unless bitcoin splits and miners finally wreck bitcoin in 2 months or so (which is highly unlikely i should add) i can not see price going below $2100 ever again.

and TA has been proven to be useless in 99% of the times when it comes to bitcoin :)

If it goes up anymore, your already sloppy head and shoulders will be completely invalidated.

There were history, bitcoin price movements were not following exact fundamental pattern recognitions. Fundamentals will work only with same market conditions, anything drastic change in to the market conditions like more number of new investors/government policy changes might result in breaching fundamentals.

Even bitcoin may find downfall in upcoming days, it will not sustain there. A quick sharp bounce back is highly possible in more quicker times.

Chart analysis is only accurate up to a certain point.

It is best to take into account what is actually happening, community sentiment, whether anything special is occuring before reaching your decision of whether it's going t obe a bull market or a bear market.

Right now, without looking at any chart, i can tell you that we're probably going to be breaking $3000 before any sort of adjustment happening. If it doesn't reach $3000, like the last pump, it's going to get dumped to somewhere like $2000. Why do i know this? Past experience and what most of the community believes in, and that's a big part of what traders look at as well. But you have to question yourself, is chart analysis any more than guessing? It's not even an educated guess, at least to me. Finding random patterns out of nowhere is rarely useful.

Oh buddy... lol

You were probably saying you can never see the price going below $1,000 again in November of 2013, right?

Never again? That's a ridiculously bold claim and almost certainly false. Why on earth would you think it will NEVER be below $2100 again despite the fact that bitcoin's intrinsic value is far below that?

99% of chart analysis is garbage. People post charts here with complicated lines drawn all over them that really just tell whatever narrative they want to tell... they draw the lines to fit their desires/predictions. The only reliable indicator of future price behavior is fundamental analysis, assuming a relatively efficient market. This is why bitcoin is hard to forecast - the market is very inefficient.

That being said, head/shoulders and double top/bottom are about the only form of TA that are reasonably accurate. In fact, head and shoulders is regarded as one of the best and strongest indicators of a trend reversing (http://www.investopedia.com/terms/h/head-shoulders.asp).

As far as your prediction goes though, it seems like you are just guessing based on your gut. I don't think your past experience gives any weight whatsoever to your prediction... being experienced is not evidence. Neither is claiming that the community wants to push btc over $3,000. In fact, in this case, I would say that seeing patterns like double top or head and shoulders are a much more reliable indicator of investor sentiment about bitcoin than your gut is.

In the past,we could see that bitcoin price has not gone below $2000 and $2000 has become the bottom stable price for bitcoin and we could not expect price to fall below that.Fluctuations is a normal occurance in bitcoin price and we need not get worried for small price fluctuations.

Who knows? It might be another head instead of a shoulder (possibility is always there). Honestly, I rarely check the price chart and only decide on my own when I trade, so far it's good. Just a thought, if all traders based their decision on the chart, there's a big possibility that we'll get the same pattern. However, it's not the case because people come and go, there are new traders and some leave trading which probably affect the price so it may or may not happen (the head/shoulder).

Why don't he he uses weekly charts instead?

Then he would see a huge head and shoulders and an inevitable correction back to $1 ???

Technical analysis not always works on cryptos, and the fundamentals may change things too

Head/shoulder pattern isn't (theoretically) a causal thing, but rather an indication of what investors are doing/thinking. The pattern is meant to be seen as an indicator. Commonly with overpriced assets (like bitcoin) the battle between buyers and sellers forms this kind of a pattern near the top.

Most people are trading bitcoin in the same way that you do - based on their own thoughts. That is why patterns like this form. They are a reflection of investor group psychology.

Head and shoulders pattern on a graph (any sort of graph not just crypto) represents a series of stock or commodity activities that can denote either an upward or downward trend in price. These fluctuations, when depicted in graph form, roughly trace out the shape of a head and shoulders (depend from what point we look at).

We have to keep in mind either of these formations can develop in the matter of hours, or they may take days or weeks; a head and shoulders pattern really can't be called that until the market activity it represents is complete. Cuz of that we are living in interesting times. If either of the head and shoulders patterns gets completed, there should be a strong move (usually buy). For upcoming phase we don't know the direction yet, but from look of thing it will be "buy" move.

We're still deep in the middle of a bull market.

The good news (http://coin.dance/blocks) that SegWit signalling could be imminent when they actually need to is going to push the price up higher within a month.  After that who knows.

Technical analysis is utter bullshit anyway.  The charts are just a representation of market activity.  The more technical analysts that are involved, the less fundamentals actually determine the value of Bitcoin and the more the price is just empty speculation.  Not to mention the fact that it's essentially gambling because people have different ideas on it.

It's hilarious to see these people gambling their money on a bear market being really soon based on nothing.

In this particular case, it's probably also an indication of what speculators are thinking as well as investors. The wave of new investors brought it up to the left shoulder - I think that's when the speculators jumped in. These new investors, surprised at the quick gains, took profit. That's the head. But you're absolutely right: group psychology more than anything else.

Making bullish bets is also gambling. I personally don't bet on either side because crypto is very high risk and not nearly high enough reward to warrant the risk compared to other investments.

I agree that 99% of technical analysis is bullshit. However, I do think that double top/bottoms and head/shoulder reversals have some merit to them. They often help with finding good exit points after making a profit or good entry points on an asset whose trend is about to reverse. Head and shoulders is considered one of the most reliable patterns. Other than these two though, which are still iffy, I agree that TA is useless. Fundamental analysis is the only way to consistently profit. That being said, fundamental analysis is basically impossible with bitcoin.

https://twitter.com/demoinvestor/status/879101828721504256

Updated chart... seems to still be consistent with head and shoulders, suggesting trend might reverse